Investor Satisfaction with CPAs Is High Investor Satisfaction with CPAs

Welcome to the Fall 2009
Professional Issues Update An Exclusive Benefit For MACPA Members “A pioneer in using social media and Web 2.0 technologies in A 20 accounting, Hood (and his team at MACPA) has tapped his expertise to roll out one of the most extensive sets of resources in the country for helping CPAs handle the recession.” y p g - Bill Carlino, Editor Accounting Today Magazine 1

Q: What is the #
1 Issue facing all CPAs? A: Keeping up with changing standards & regulations “As it relates to science and technology, the rate of change in the next decade, is likely to be 4 to7 times decade faster than in the last decade. If it is 4x faster it would be like planning for 2006 in 1890, if it is 7x faster it would be like planning for 2006 in 1670 ” 1670. -Expert on Education Panel, The Aspen Institute, 2007 4

Outcomes for today • Understand
the trends and issues facing your Profession and your organization • Learn about the structure of the CPA profession and how you can see & influence major trends and issues • Gain insights that can help you jump the experience curve as a future leader • L Learn some ways t d l to deal with rapid & constant change 6

What is above knows what
is below, but what is below does not know what is above. One climbs, one sees. One descends one sees no longer but sees descends, longer, one has seen. There is an art of conducting oneself in the lower regions by the memory of what one saw higher up. When one can no longer see, one can at least still know. -Rene' Daumal “The faster you go, the further ahead you have to see.” 7

Insights & Opportunities “But a
time of turbulence is also one of great opportunity for those who can understand accept understand, and exploit the new realities. realities It is above all a time of opportunity for leadership.” p - Peter Drucker, Managing in Turbulent Times g g 8

From the Spring PIUs If
I were chair of the MACPA, I would… ,  Many began their response with ‘continue’ – as in i continue to: enhance the image of CPAs, ti t h th i f CPA improve the types of education offered, recruit young people into the profession  Attract & retain top candidates to the profession  Promote integrity of the profession  Increase networking opportunities  Offer more low/no cost CPE 12

What will the new normal
look like? “It is increasingly clear th t th i i i l l that the current downturn is fundamentally different from recessions of recent decades decades. We are experiencing not merely another turn of the business cycle, but a cycle restructuring of the economic order.” – Ian Davis, McKinsey Quarterly March, 2009 15

“the basic physical and organizational
structures needed for the operation of a t t d d f th ti f society or enterprise” The infrastructure for the free market was found to be in disrepair in this latest market crisis and the CPA profession is a critical component 23

Three Drivers • Fair Market
Value (Acctg Standards) • Futures & Derivatives • Investment Advisors & Broker-Dealers When is the last time these guys had accounting as the major topic of their agenda? 24

The Real Costs of Changing
FMV? “Confidence, trust, and numbers that investors can believe in are the stuff that make or break the capital markets. When investors question the validity of numbers, they sell and wait, rather than buy and invest. Yet those charged with building confidence and ith b ilding trust and presenting numbers that can be believed are under sustained attack -- and they are losing.” g - Arthur Levitt, Weakening a Market Watchdog in Washington Post – March 26 26, 20009 29

Sales Tax on Services •
Should accounting services be taxed? • We’ve fought and won on this numerous times -- We ve -- but times are changing • 19 states are considering taxing services g g • Could be an issue in 2012-2013 budget – Loss of the one-time bailout funding leaves an $8 g Billion hole to fill • QUESTION: Should this continue to be a bedrock issue for MACPA? 46

IFRS – International Financial Reporting
Standards "Accounting standard setters should take action to make significant p g g progress towards a single set of high g g quality global accounting standards by the end of 2009.“ – from G-20 Report The Washington Action Plan 53

Supply and Demand Trends •
Accounting enrollments continue on an upward trend, advancing 4.7% in 2007-08 … – All degree levels – Bachelor’s, Master’s and Doctoral – show increases. • Capacity constraints in accounting programs continue to be a concern, one likely to be exacerbated by current economic conditions. conditions • Shortage of PhDs causing students to be turned away 64

Here comes the Net Generation
"There is plenty of cause for alarm and/or optimism There when it comes to my generation; even I can see that. Still I think the negative views of us come from a fear of the unknown, a fear of change. Our world is evolving at a rapid rate, and that can be scary for older generations ld ti — Savannah Jones, 17, Portland, Oregon NGenophobia—the irrational and morbid fear of youth, especially with regards to their use of the Internet 67

The Future of Work •
In 2019, Gen X will finally be in charge. And they will make g y some big changes. – collaborative decision-making that might involve team members scattered around the world, from Beijing to Barcelona to Boston, whom the nominal leader of a given project may never have met in person. From Time Magazine – The Future of Work 70

Generation Gap? Or Generation Lap?
Generations One third (35%) of American adult internet users have a profile on an online social network site, f four times as many as three years ago, but still much lower than the 65% of online American teens who use social networks “In 1997, young people for the first time were recognized by adults as being authorities on something t l revolutionary – di it l t h l thi truly l ti digital technology, interactive media, and collaboration.” – Don Tapscott “Growing Up Digital” 71

What can a blog do for you? What can a blog
do for you?  Establish your company as a thought leader Establish your company as a thought leader  Reinvent your marketing strategy  Build communities and improve customer relations E h Enhance legislative advocacy l il i d  Expand your brand 95

Social Notworking? Social Notworking? This is defined as “The s
s de ed as e practice of spending time unproductively on social‐ networking websites, k b especially when one should be working, or When you be working ” or “When you spend all days at your job on social networking sites such g as facebook,myspace and twitter.” 102

Research says… "One day at work
they took away our tools, like One day at work they took away our tools, like Facebook, Pandora, Bebo, NPR. Work is slow now, cold and boring." —STEVE RESSLER, 27, TAMPA, FLORIDA In a social environment based on networked individualism, the internet s internet’s capacity to maintain and cultivate social networks has real payoffs (in the workplace).”– “The Strength of Internet Ties” Report 104

Say what? y • “An
increase of larger firms will result from an increase in mergers. Accounting firms will look more like law firms in terms of size.” -Marc Rosenberg • “There will be more large firms.” – Marc Rosenberg • “Mergers and acquisitions will increase.” – Jeff Pawlow, The Growth Partnership IPA Consultant Predictions – Jan, 2006 115

The Year of the CFO
As financial skills are valued more highly, CFOs will make it to the corner office in greater numbers than before. Recession, credit crunch and the increasingly complex nature of global companies will all play directly into the bean counter’s hands. counter s hands Source: The Economist Magazine The World in 2009 Nov, 2008 122

IFRS Opportunity? – Meet Joe
Box, CPA - CFO of Joe M J Money Machinery M hi “Well, the IASB is coming out with a simplified version for private companies With IFRS you mark companies. IFRS, mark- to-market more assets. We're a 72-year-old company that has real estate on our books at historical cost, so there could be a big benefit in g IFRS based on the substantially higher fair market value for that property. Any private-company CFO should be knowledgeable about it, to determine whether to consider adoption ” adoption. “But even more importantly, it has been my objective that our key bankers consider me knowledgeable in the issues important to their commercial portfolio. XBRL is another one.” 126

Image is better than pre-Enron
highs The future success of the CPA profession relies a great deal upon public perception of CPAs' CPAs abilities & roles - CPA Vision Project 130

Attitudes toward CPA Credential Attitudes toward CPA Credential
76% % 74% 66% 60% 43% Investors 31% BDMs More confident in a job Accountants certified by non‐ CPA requires more done by a CPA than if it U.S. organizations, such as the rigorous training and Association of Chartered were done by an testing than any other Certified Accountants (ACCA), accountant not a CPA. accountant not a CPA financial credential. fi i l d i l are just as qualified as CPAs. 131

Dealing with Change Change is
the law of life. Those who look only to the p y past or present are certain to miss the future." - John F. Kennedy 139

Five Qualities of Extraordinary Leaders
1. Sight - Ability to see emerging patterns and shift perspective when necessary LC 2. 3. 3 Insight - Ability to learn faster than the rate of change in your industry Create - Ability to think C t strategically and critically to gain insights that create new opportunities 4. Communicate - Ability to collaborate inside and outside you organization and o build your o ga a o a d to bu d and sustain social networks of people engaged in the work 5. Inspire – Ability to mobilize p support and engage others to join you in ACTION 140

Our six point plan to
help you through thi recession this i • 24 hours of free CPE • MACPA’s new career center • Economic Resource Center • New Business Services • New & Improved MDBIZEXPO – June 28th & 29th N I d J • Promoting & protecting your CPA license “Hood (and his team) has tapped his expertise to roll out one of the most extensive sets of resources in the country for helping CPA firms handle the recession.” p g – Bill Carlino, editor Accounting Today Magazine 144

Five Qualities of Extraordinary Leaders 1. Sight ‐ Ability to see emerging patterns and shift perspective when
necessary LC 2. Insight ‐ Ability to learn faster than the rate of change in your industry 3. Create ‐ Ability to think strategically 3 Create Ability to think strategically and critically to gain insights that create new opportunities 4. Communicate ‐ Ability to 4 Communicate Abilit t collaborate inside and outside your organization and to build and sustain p p g g social networks of people engaged in the work 5. Inspire – Ability to mobilize support and engage others to join you in and engage others to join you in ACTION 150